Generally speaking, the lower the risk return of a fund, the lower the fund fee. Bond funds are more sensitive to the rate of return than stock funds, because the rate of return of bond funds is limited and the impact of the rate of return is greater. The rate of stock funds is usually higher than that of bond funds.
Fund fees usually include subscription fees (or subscription fees), redemption fees, sales service fees, management fees, custody fees and other related expenses for fund issuance and operation.
We are familiar with the subscription fee and redemption fee, and it is also easy to understand. Some foundations charge sales service fees, which are a general category of fees, including commissions paid to sales organizations, marketing advertising fees of fund managers and fees for some service types. Generally speaking, it is aimed at class C funds. In most cases, the subscription fee for Class A shares will be directly deducted from the initial investment of investors, but no sales service fee will be charged; Class C shares do not charge the initial subscription fee, but will charge a certain sales service fee.
Management fee is the management remuneration paid to the fund manager. Most domestic funds charge a fixed-rate management fee, that is, a certain proportion of the fund's net asset value. However, in recent years, there have been some funds that charge floating management fees according to their performance.
In addition to these visible transaction costs, there are some hidden costs, such as transaction costs and market impact costs.
Transaction costs refer to the fees paid by the fund when buying and selling securities. The transaction cost increases with the increase of transaction frequency, which we should pay attention to when choosing funds. Funds that earn excess returns through high-frequency trading are another matter.
Market shock cost refers to the cost of buying or selling quickly and in large scale in the transaction, failing to close the transaction at the predetermined price, resulting in too long transaction time and thus overpaying. If the fund's subscription and redemption are long-term balanced, the market impact cost will be relatively low.